Shamrock Activist Value Fund L P DFAN14A Additional proxy materials by non-management

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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TEXAS INDUSTRIES, INC.

(Name of Registrant as Specified in Its Charter)

SHAMROCK ACTIVIST VALUE FUND, L.P.

SHAMROCK ACTIVIST VALUE FUND IV, L.P.

STANLEY P. GOLD

DENNIS A. JOHNSON

SHAMROCK ACTIVIST VALUE FUND GP, L.L.C.

SHAMROCK PARTNERS ACTIVIST VALUE FUND, L.L.C.

MARJORIE L. BOWEN

GARY L. PECHOTA

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

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Shamrock Capital Advisors, Inc.

July 2009

Investor Presentation Regarding

Texas Industries, Inc.

(NYSE: TXI)

Shamrock Activist Value Fund, L.P. is nominating three candidates to

replace management’s nominees at the 2009 annual meeting because

we

believe

that

TXI

is

substantially

undervalued

due

to

operational

underperformance

caused

by

an

entrenched

board

exercising

weak

oversight:

•

TXI has attractive assets in two of the most strategically important cement

markets

in

the

United

States

–

Texas

and

California

•

Management

has

failed

to

unlock

what

we

believe

to

be

TXI’s

intrinsic

value

2

Purpose

Our nominees are focused on improving management oversight and

governance practices intended to improve shareholder value and

operational performance

We

believe

TXI

is

undervalued

because:

TXI

has

a

history

of

underperformance

•

TXI operating margins and return on invested capital consistently lag peers

•

TXI stock has underperformed its peers

•

We believe a pattern of over-promising and under-delivering has reduced

credibility and may be a factor in TXI trading at a discount to its peers

Board’s

interests

are

not

sufficiently

aligned

with

TXI’s

shareholders

•

The

board

implemented

a

“poison

pill”

without

shareholder

approval

•

The

Company’s

board

nominees

received

very

high

“withhold”

votes

in

2007

and 2008, evidencing widespread stockholder discontent

•

Although the board and management own only 1.4% of the shares

outstanding, they have implemented substantial antitakeover provisions that

in our view do not promote shareholder value

•

While TXI consistently underperformed, senior management’s pay grew at a

+25% compound annual growth rate over the last 5 years

3

Make

operational

improvements

•

Our nominees will seek improvements to returns on invested capital and operating margins

Promote

accountability

•

Our nominees will call for strict management accountability to adequately improve operations

and link management pay to performance

Review

strategic

alternatives

•

Our nominees will encourage the board to:

—

Perform a comprehensive strategic review

—

Carefully consider all capital allocation decisions

Recommend

corporate

governance

improvements

•

Annual elections for all directors

•

Majority voting standard in uncontested director elections

•

Require shareholder approval of any “poison pill”

•

Eliminate all supermajority shareholder voting provisions from certificate of incorporation and

bylaws

•

Provide shareholders the right to call special meetings and act by written consent

•

Annual shareholder advisory vote on compensation

4

Shamrock nominees will seek to:

Shamrock

Capital

Advisors,

Inc.

-

Overview

•

Shamrock Capital Advisors, Inc. (“SCA”) is the manager of Shamrock

Activist Value Fund, L.P. and its parallel fund, Shamrock Activist Value Fund

IV, L.P., (collectively the “Shamrock Activist Value Fund”, or “SAVF”).  SCA

is a subsidiary of Shamrock Holdings, Inc.

•

SCA manages funds with 5 distinct strategies with total capital under

management of $1.8 billion

•

The Shamrock Activist Value Fund holds 2.8 million shares of TXI,

representing approximately 10.2% of the outstanding TXI common stock

•

The Shamrock Activist Value Fund combines a deep value focus with

shareholder activism

•

The Shamrock Activist Value Fund has $800 million in committed capital

from major public pension funds and the Roy E. Disney family

5

TXI’s

history of underperformance

6

7

(1)

TSR is total shareholder returns, cumulative and dividend adjusted, for periods ending 7/10/09.

(2)

TXI returns assume that Chaparral Steel spin-off shares were sold after the spin-off for $18.40 per share and the

proceeds were reinvested in TXI stock.

(3)

Peer

group

(VMC,

MLM,

EXP)

is

used

by

TXI

Compensation

Committee

in

determining

director

compensation

as

per

2008 TXI proxy statement.  Peer group returns calculated as market capitalization weighted index.

Source: Capital IQ as of 7/10/09. 

TXI’s

stock has underperformed its peers over multiple

periods

TXI

Historical

Stock

Performance

Summary

(37%)

(43%)

3%

19%

(17%)

(32%)

24%

28%

(50%)

(40%)

(30%)

(20%)

(10%)

0%

10%

20%

30%

40%

1-YR TSR

3-YR TSR

5-YR TSR

10-YR TSR

TXI

Peer Group

(3)

(1)

(2)

8

TXI margins are among the lowest in its industry…

LTM

EBIT

Margins

Source: Capital IQ.  5-year average EBIT margin is average of last 5 calendar years. 

We believe TXI’s

low relative margins illustrate the need for better

board oversight

5-Year

Average

EBIT

Margins

0%

5%

10%

15%

20%

Mitsubishi Materials

Texas Industries

CRH

Eagle Materials

Vulcan Materials

Italcementi

CEMEX

Holcim

HeidelbergCement

Martin

Marietta Materials

Titan Cement

Buzzi

Unicem

Cementos

Portland Valderrivas

Lafarge

0%

5%

10%

15%

20%

25%

Mitsubishi Materials

Texas Industries

CRH

HeidelbergCement

Italcementi

CEMEX

Martin

Marietta Materials

Vulcan Materials

Lafarge

Holcim

Buzzi

Unicem

Eagle Materials

Cementos

Portland Valderrivas

Titan Cement

9

…and return on capital is also among the lowest in its

industry

LTM

Return

on

Invested

Capital

Source: Capital IQ.  ROIC is net operating profit after taxes divided by average invested capital.

5-year average ROIC is average of last 5 calendar years.

We believe TXI management and board have made poor capital

allocation decisions, as illustrated by the Company’s low relative ROIC

5-Year

Average

Return

on

Invested

Capital

0%

2%

4%

6%

8%

10%

Mitsubishi Materials

Texas Industries

Vulcan Materials

CEMEX

Eagle Materials

Cementos

Portland Valderrivas

Italcementi

Holcim

HeidelbergCement

Lafarge

Titan Cement

CRH

Martin

Marietta Materials

Buzzi Unicem

0%

5%

10%

15%

20%

Mitsubishi Materials

Texas Industries

HeidelbergCement

CEMEX

Holcim

Lafarge

Italcementi

CRH

Cementos

Portland Valderrivas

Vulcan Materials

Martin

Marietta Materials

Buzzi Unicem

Titan Cement

Eagle Materials

10

Board has authorized management to spend $782 million on

expansion projects that have yielded no incremental earnings

(1)

Company estimate as of May 2009 construction halt. Hunter expansion is halted indefinitely.

(2)

SAVF estimates.  Hunter expansion has not been completed so no additional production has come on line. 

Oro Grande plant is running at breakeven according to Company.

Source: SEC filings, TXI earnings conference call transcripts.

$427 million spent on Oro Grande expansion (2005-2008)

$300

million

spent

on

suspended

Hunter

expansion

(2007-2009)

(1)

+

$0

in

incremental

earnings

(2)

$55 million of capitalized interest (2005-2009)

+

11

•

TXI misjudged declining cement demand in its markets and was slow to

change course in response to the construction downturn

•

While the competition was focusing on conserving capital and preserving

balance

sheet

flexibility,

TXI

incurred

substantial

leverage

and

continued

to

expend significant cash on expansion projects

•

TXI spent to expand production capacity into the downturn, only to suspend

the

Hunter

expansion

project

after

spending

$300

million

without

realizing

any additional production capacity

•

TXI has been slow to right-size its cost structure to match operating costs

with demand

TXI has misjudged the downturn in demand

12

(1)

Total cash compensation equals sum of salary, bonus and LTIP payout.  Top 5 officers as per proxy in each

fiscal year.

Source: TXI proxy filings.

Despite poor performance, management’s compensation

has grown at a 25% CAGR over a five year period

CAGR

+25%

+20%

+36%

$1.7

$2.7

$2.7

$3.8

$5.7

$5.2

$0

$1

$2

$3

$4

$5

$6

$7

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

TXI

Top

5

Officers

Total

Cash

Compensation

($

in

millions)

(1)

CEO

Officers ex. CEO

The board has rewarded management with pay raises despite

underperformance

$0.5

$1.1

$0.9

$1.4

$2.4

$2.2

$1.2

$1.6

$1.9

$2.4

$3.3

$3.0

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

13

(1)

VMC currently has negative EPS and tangible book value.

(2)

VMC 5-year average P/TBV is not meaningful (18.8x).

Source: Capital IQ as of 7/10/09.

TXI stock trades at a discount to its peers

TXI stock currently trades at the lowest multiples in its peer group

Price

/

EPS

Price

/

Tangible

Book

Value

ROIC

2.8%

4.3%

8.1%

5.4%

10.6%

16.0%

9.4%

2.9%

ROIC

2.8%

4.3%

8.1%

5.4%

10.6%

16.0%

9.4%

2.9%

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

NM

NM

NM

Materials

Vulcan Materials

Texas Industries

Martin Marietta

Materials

Eagle Materials

Martin Marietta

Vulcan Materials

Texas Industries

Eagle Materials

Vulcan Materials

Texas Industries

Eagle Materials

Martin Marietta

Materials

Vulcan Materials

Texas Industries

Eagle Materials

Martin Marietta

Materials

Board and management interests are not

sufficiently aligned with shareholder interests

14

15

Classified board

All directors should be elected annually

Plurality voting in director elections

Majority vote in all uncontested director

elections

“Poison

pill”

implemented

by

board

without shareholder approval

No active poison pill in place without

shareholder approval

Supermajority shareholder voting

standards

Simple majority voting on all

shareholder matters

Shareholders cannot call a special

meeting or act by written consent

Shareholders should have the right to

call special meetings and act by written

consent

No shareholder “say on pay”

Annual shareholder advisory vote on

compensation

Not transparently communicating

regarding high withhold votes in

director elections

Communicate clearly with shareholders

regarding the source of discontent and

plans to remedy problems

Our nominees will advocate improved corporate governance practices

at TXI

Current policy

SAVF Recommendation

TXI should improve its corporate governance policies

16

Is the board listening to shareholders?

Proxy

Year

Mel G. 

Brekhus

David S.

Coats

Gordon E.

Forward

Keith W.

Hughes

Henry H.

Mauz, Jr.

Thomas R.

Ransdell

Robert D.

Rogers

Ronald G.

Steinhart

2008

49%

49%

2007

24%

25%

1%

2006

7%

2%

2%

2005

2%

2%

2004

10%

10%

2003

1%

1%

1%

2001

15%

Tenure

(2)

5

4

18

6

6

4

39

2

%

Votes

withheld

(1)

(1)

Eugenio

R.

Clariond

is

not

shown

as

he

was

appointed

without

a

shareholder

vote

on

January

15,

2009,

after

the 2008 annual meeting, to replace Robert Alpert, who retired after 33 years on the board.

(2)

Per 2008 TXI proxy statement.

How has the board responded to high withhold votes at the 2007 and

2008 annual meetings?

17

The interests of TXI’s

Directors and Management are not

sufficiently aligned with shareholders

(1)

As per 2008 TXI proxy statement.

Low

stock

ownership

•

Only

1.4%

of

outstanding

stock

owned

by

full

board

and

Top

5

management

(1)

•

Only 0.1% of outstanding stock owned by all incumbents up for re-election

Pay

not

linked

to

performance

•

Top 5 managers got substantial raises in cash compensation over the past 5 years,

regardless of poor performance

Succession

planning

•

Long-term, insular network of directors

Poison

Pill,

Classified

Board

and

Plurality

Voting

in

Director

Elections

•

Can be misused to protect incumbents and preserve status quo

•

May

preclude

or

discourage

value

maximizing

transactions

such

as

premium

price

acquisitions

Shamrock nominees

18

Enhance

oversight

of

operational

performance

•

Gary

L.

Pechota

has

over

18

years

experience

in

cement

operations

as

CEO

of

Giant Cement

Holding,

Inc.

(1994-2001),

President

of

Giant

Group

Ltd.’s

cement

operations

(Keystone

Cement

Company

from

1992-1994

and

Giant

Cement

Company

from

1993-

1994)

and

CEO

of

Dacotah

Cement

(1983-1992)

•

Transformed

Giant

Group

Ltd.’s

cement

operations

from

nearly-insolvent

cement

producer

to

a

successful

diversified

building

products

firm

•

Giant

Cement

Holding

recognized

as

one

of

Forbes

Best

Small

Companies

in

1999

based

on

five-year

financial

performance

•

Successfully

sold

Giant

Cement

Holding

to

Cementos

Portland,

generating

a

120%

return for

investors

Currently,

none

of

TXI’s

non-management

directors

has

hands-on

cement

operations

experience

Review

strategic

alternatives

and

capital

allocation

policies

•

Marjorie

L.

Bowen

has

20

years

experience

as

an

investment

banker

with

Houlihan

Lokey

Howard

and

Zukin

advising

boards

of

public

companies

on

transactions,

strategic

alternatives

and

capital

allocation

decisions

•

Member

of

Financial

Advisory

Services

Committee

•

National

Director

of

Houlihan’s

fairness

opinion

practice

19

Shamrock’s nominees are qualified to address key

concerns

Improve

corporate

governance

•

Dennis A. Johnson is a Senior Portfolio Manager for Shamrock Activist Value

Fund

•

Member SEC Investor Advisory Committee

•

Former Chairman of the Council of Institutional Investors

•

Prior to Shamrock, Senior Portfolio Manager in charge of all global corporate governance

activities for CalPERS

20

Shamrock’s nominees are qualified to address key

concerns

•

TXI’s

underperformance must be addressed in order for the company to be

optimally positioned to realize maximum value in the next cycle

•

Shareholders cannot afford the high cost of continuing the status quo

•

Our

nominees

will

seek

to:

Improve operational performance

Promote a culture of accountability

Evaluate strategic alternatives

Improve corporate governance

21

We believe now is the time for change at TXI

We

seek

to

maximize

value

for

all

shareholders

of

TXI

).

22

Shamrock Activist Value Fund, L.P., a Delaware limited partnership and its parallel fund,

Shamrock Activist Value Fund IV, L.P., a Delaware limited partnership (collectively, the

“Shamrock Activist Value Fund”), intend to file a proxy statement and related materials with

the Securities and Exchange Commission (“SEC”) in connection with the solicitation of proxies to

elect Shamrock Activist Value Fund, L.P.’s nominees to the Board of Directors of Texas

Industries,

Inc.

at

the

2009

Annual

Meeting

of

Shareholders

(the

“2009

Annual

Meeting”

The

Shamrock

Activist

Value

Fund

urges

all

Texas

Industries

shareholders

to

read

the

Shamrock

Activist Value Fund’s proxy statement and other publicly-filed proxy materials as they become

available, because they will contain important information.

The Shamrock Activist Value Fund, Marjorie L. Bowen, Dennis A. Johnson, Gary L. Pechota,

Stanley P. Gold, Shamrock Activist Value Fund GP, L.L.C. and Shamrock Partners Activist Value

Fund, L.L.C. are participants (collectively, the “Participants”) in the solicitation of proxies for

use at the 2009 Annual Meeting.  Information regarding the Participants is contained in the

Shamrock Activist Value Fund’s Soliciting Materials filed pursuant to Rule 14a-12 in connection

with the proposed solicitation (the “14a-12 Filings”) and in its filings on Schedule 13D relating

to its investment in Texas Industries, Inc. (the “13D Filings”).  Information regarding the

Participants also will be included in the Shamrock Activist Value Fund’s proxy materials for the

2009 Annual Meeting.  The 14a-12 Filings, 13D Filings and all proxy materials filed by the

Shamrock

Activist

Value

Fund

with

the

SEC

will

be

available

without

charge

at

the

SEC’s

website

at www.sec.gov.  In addition, the Shamrock Activist Value Fund will provide copies of its

definitive proxy materials for the 2009 Annual Meeting without charge upon request.  Except as

disclosed

in

the

14a-12

Filings

and

13D

Filings,

none

of

the

Participants

has

a

direct

or

indirect

interest, by security holdings or otherwise, in the matters subject to the Shamrock Activist Value

Fund’s proxy solicitation.